Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<ul>
<li>Maintain HOLD recommendation for DOHOME with a target price of Bt14.10. DOHOME’s 3Q22 net profit came in at Bt50m (-85%YoY,-84%QoQ),in-line with our forecast but below BB consensus estimated by 34%</li>
<li>3Q22 earnings sink both YoY and QoQ Its net profit came out at Bt50m (-85%YoY, -84%QoQ),the lowest level since listed.The 9M22 result accounted for 88%of full-year net profit in 2022.</li>
<li>The significant drop in 3Q22 earnings pressured by lower margin from steel products, clearance sales in decoration materials category, and rising all products cost as a result from rising inflation.</li>
</ul>


Maintain HOLD recommendation for DOHOME with a target price of Bt14.10. DOHOME’s 3Q22 net profit came in at Bt50m (-85%YoY,-84%QoQ),in-line with our forecast but below BB consensus estimated by 34%
3Q22 earnings sink both YoY and QoQ Its net profit came out at Bt50m (-85%YoY, -84%QoQ),the lowest level since listed.The 9M22 result accounted for 88%of full-year net profit in 2022.
The significant drop in 3Q22 earnings pressured by lower margin from steel products, clearance sales in decoration materials category, and rising all products cost as a result from rising inflation.


<ul>
<li>We downgrade our recommendation from BUY to HOLD with a target price of Bt14.1 (Previous TP:Bt22).Our new target price reflects 2023 earnings downward revision by 36%to factor in lower margin </li>
<li>Expect 3Q22 earnings to be bottom of the year Revenue in 3Q22 is expected to post at Bt7.5bn (+24%YoY,-5%QoQ). YoY growth in revenue will mainly drive by SSSG at 7%YoY</li>
<li>We assume gross profit margin in 3Q22 to contract to 14%,the lowest level in the past 15 quarters mainly pressured by lower margin from steel products,clearance sales in decoration materials</li>
</ul>


We downgrade our recommendation from BUY to HOLD with a target price of Bt14.1 (Previous TP:Bt22).Our new target price reflects 2023 earnings downward revision by 36%to factor in lower margin 
Expect 3Q22 earnings to be bottom of the year Revenue in 3Q22 is expected to post at Bt7.5bn (+24%YoY,-5%QoQ). YoY growth in revenue will mainly drive by SSSG at 7%YoY
We assume gross profit margin in 3Q22 to contract to 14%,the lowest level in the past 15 quarters mainly pressured by lower margin from steel products,clearance sales in decoration materials


DOHOME : Expect the Lowest Earnings Since Listed in 3Q22

<ul>
<li>Maintain BUY recommendation for DOHOME with a target price of Bt22. DOHOME’s reported gross profit margin (GPM) contracted to 16.8% in 2Q22 caused by rising products costs</li>
<li>Margin is a key concern DOHOME’s gross profit margin is around 14.7%-22.7% during the past three-years.Profit margins are strong correlated with steel prices as steel products account for25%-30%of total revenue.</li>
<li>DOHOME’s reported 2Q22 gross profit margin contracted to 16.8% caused by rising products costs and higher revenue contribution from low margin segment (construction materials).</li>
</ul>


Maintain BUY recommendation for DOHOME with a target price of Bt22. DOHOME’s reported gross profit margin (GPM) contracted to 16.8% in 2Q22 caused by rising products costs
Margin is a key concern DOHOME’s gross profit margin is around 14.7%-22.7% during the past three-years.Profit margins are strong correlated with steel prices as steel products account for25%-30%of total revenue.
DOHOME’s reported 2Q22 gross profit margin contracted to 16.8% caused by rising products costs and higher revenue contribution from low margin segment (construction materials).


DOHOME : Margin Squeezed Should Be in the Price

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>We recommend buying M to speculate on the expected strong recovery of its 2Q22E earnings following the reopening of the country.</li><li>We project the firm’s earnings to turn around from the Bt99mn loss reported in 2Q21 to a net profit of Bt392mn in 2Q22E, up 494% YoY and 45% QoQ, driven by the expected increase in SSSG at its chain restaurants, i.e., MK at +60%, Yayoi at +53% and Laem Charoen at +54%.</li><li><span style="font-size: var(--content-font-size);">AH’s main business is OEM auto parts, contributing 74% of revenue in 2021.</span></li></ul></div></div></div></div>

We recommend buying M to speculate on the expected strong recovery of its 2Q22E earnings following the reopening of the country.We project the firm’s earnings to turn around from the Bt99mn loss reported in 2Q21 to a net profit of Bt392mn in 2Q22E, up 494% YoY and 45% QoQ, driven by the expected increase in SSSG at its chain restaurants, i.e., MK at +60%, Yayoi at +53% and Laem Charoen at +54%.AH’s main business is OEM auto parts, contributing 74% of revenue in 2021.

<ul>
<li>Maintain BUY recommendation for DOHOME with a target price of Bt22. DOHOME’s 2Q22 net profit was at Bt315m (-48%YoY,-36%QoQ), in-line with our forecast but below BB consensus estimated by 14%. </li>
<li>2Q22 earnings sink both YoY and QoQ DOHOME reported a net profit of Bt315m in 2Q22(-48%YoY,-36%QoQ),the lowest level in the past six-quarters.The 1H22 result accounted for 57% of our 2022E.</li>
<li>The YoY and QoQ drop in 2Q22 earnings pressured by rising products costs and higher SG&amp;A expense from new stores expansion.</li>
</ul>


Maintain BUY recommendation for DOHOME with a target price of Bt22. DOHOME’s 2Q22 net profit was at Bt315m (-48%YoY,-36%QoQ), in-line with our forecast but below BB consensus estimated by 14%. 
2Q22 earnings sink both YoY and QoQ DOHOME reported a net profit of Bt315m in 2Q22(-48%YoY,-36%QoQ),the lowest level in the past six-quarters.The 1H22 result accounted for 57% of our 2022E.
The YoY and QoQ drop in 2Q22 earnings pressured by rising products costs and higher SG&amp;A expense from new stores expansion.


DOHOME : 2Q22 Earnings Fall to Six-Quarters Low

Thailand

Dohome Public Company Limited operates as a furnishing store. The Company retails hardware, tools, agricultural machinery, furniture, hvac equipment, and other related products. Dohome serves customers in Thailand.

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Dohome PCL (DOHOME TB)

DOHOME : Weak 3Q22 Earnings as Expected

Maintain HOLD recommendation for DOHOME with a target price of Bt14.10. DOHOME’s 3Q22 net profit came in at Bt50m (-85%YoY, -84%QoQ), in-line with...

Pi Securities PCL, Thailand

DOHOME : Expect the Lowest Earnings Since Listed in 3Q22

We downgrade our recommendation from BUY to HOLD with a target price of Bt14.1 (Previous TP: Bt22). Our new target price reflects 2023 earnings...

Pi Securities PCL, Thailand

DOHOME : Margin Squeezed Should Be in the Price

Maintain BUY recommendation for DOHOME with a target price of Bt22. DOHOME’s reported gross profit margin (GPM) contracted to 16.8% in 2Q22 caused...

Pi Securities PCL, Thailand

Small Cap Top Picks - August 8, 2022

We recommend buying M to speculate on the expected strong recovery of its 2Q22E earnings following the reopening of the country.

Krungthai XSpring

DOHOME : 2Q22 Earnings Fall to Six-Quarters Low

Maintain BUY recommendation for DOHOME with a target price of Bt22. DOHOME’s 2Q22 net profit was at Bt315m (-48%YoY, -36%QoQ), in-line with our...

Pi Securities PCL, Thailand

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